Tuesday, March 31, 2009
Diagramming Geithner's Plan
Explanation of the Toxic Asset Theory of banks' failure to lend, and the Treasury's recent proposals to "solve the problem," including the original idea behind TARP as well as Geithner's new plan of Private-Public Partnership Investment
Program. (14 minutes)
But wait, there's more!
Caveat: The criticisms are good, but the speaker's proposed alternative solution is not.
Geithner Plan II (12 minutes)
These clips demonstrate how the new plan sets us up for yet even more government-subsidized risk through "investment" scenarios which end in either private gain or socialized loss. Additionally, the government's diagnosis is flawed on several levels.
The problems Geithner's plan aims at solving appear to be primarily: (1) potential bank insolvency if "toxic assets" are sold at market price, and (2) the failure of banks to loan in spite of recent and copious money infusions from the government. The first aspect is to be addressed by providing banks with an indirect bailout--government assistance to buy off bad assets via shared equity-risk and non-recourse loans. In regard to the second, other reasons besides toxic assets may be why banks aren't lending, perhaps most importantly, the scarcity of credit-worthy borrowers. Bailing banks out from underneath their self-inflicted exposure to declining asset values won't change the fact that people who are good credit-risks aren't interested in acquiring more debt.
How can this possibly work?
By Mark Pittman and Bob Ivry
March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.
The following table details how the Fed and the government have committed the money on behalf of American taxpayers over the past 20 months, according to data compiled by Bloomberg.
--- Amounts (Billions)---
Total $12,798.14 $4,169.71
Federal Reserve Total $7,765.64 $1,678.71
Primary Credit Discount $110.74 $61.31
Secondary Credit $0.19 $1.00
Primary dealer and others $147.00 $20.18
ABCP Liquidity $152.11 $6.85
AIG Credit $60.00 $43.19
Net Portfolio CP Funding $1,800.00 $241.31
Maiden Lane (Bear Stearns) $29.50 $28.82
Maiden Lane II (AIG) $22.50 $18.54
Maiden Lane III (AIG) $30.00 $24.04
Term Securities Lending $250.00 $88.55
Term Auction Facility $900.00 $468.59
Securities lending overnight $10.00 $4.41
Term Asset-Backed Loan Facility $900.00 $4.71
Currency Swaps/Other Assets $606.00 $377.87
MMIFF $540.00 $0.00
GSE Debt Purchases $600.00 $50.39
GSE Mortgage-Backed Securities $1,000.00 $236.16
Citigroup Bailout Fed Portion $220.40 $0.00
Bank of America Bailout $87.20 $0.00
Commitment to Buy Treasuries $300.00 $7.50
FDIC Total $2,038.50 $357.50
Public-Private Investment* $500.00 0.00
FDIC Liquidity Guarantees $1,400.00 $316.50
GE $126.00 $41.00
Citigroup Bailout FDIC $10.00 $0.00
Bank of America Bailout FDIC $2.50 $0.00
Treasury Total $2,694.00 $1,833.50
TARP $700.00 $599.50
Tax Break for Banks $29.00 $29.00
Stimulus Package (Bush) $168.00 $168.00
Stimulus II (Obama) $787.00 $787.00
Treasury Exchange Stabilization $50.00 $50.00
Student Loan Purchases $60.00 $0.00
Support for Fannie/Freddie $400.00 $200.00
Line of Credit for FDIC* $500.00 $0.00
HUD Total $300.00 $300.00
Hope for Homeowners FHA $300.00 $300.00
The FDIC’s commitment to guarantee lending under the
Legacy Loan Program and the Legacy Asset Program includes a $500
billion line of credit from the U.S. Treasury.
Saturday, March 28, 2009
Earth Hour: The Dark Ages vs. The Age of EnLIGHTenment
It's all just symbolic of course. But symbols are important. Properly chosen, they provide in a simple, visually concrete form the distilled essence of our our widest abstractions. Knowledge, experience, analysis---captured at a glance, reminding us in the space of a moment of a lifetime of identifying our highest values.
Think. Choose carefully and deliberately. And then act.
This little light of mine,
I'm gonna let it shine.
I'm gonna let it shine.
This little light of mine,
I'm gonna let it shine.
Let it shine, let it shine, let it shine
Light that shines is the light of men,
Dispels the darkness from within,
Shines on me and it shines on you,
Shows you what the power of thought can do.
Shine my light both bright and clear,
Shine my light both far and near,
In every dark corner that I find,
Let my little light shine.
Thursday, March 26, 2009
Because sometimes we need to laugh
|South Park||Wed 10pm / 9c|
Sincerely, (executive vice president of the American International Group’s financial products unit)
The New York Times has published in full this man's resignation letter in which he explains the effect of recent congressional action and grandstanding on the work, morale and lives of individuals working in the financial industry. Although his story is specific to A.I.G., the experience and implications are far wider.
When the primary law-creating body of the United States passes legislation which reverses its own very explicit promises and forces a company to renege on its contractual agreements, it should be obvious that our leaders consider themselves above the rule of law.
When taxes are implemented, for whatever reason, depriving individuals of 90% of their income, no one should be able to pretend any longer that this country still protects private property.
How long can we expect intelligent, honest individuals to continue working in occupations where they are denied fair-market compensation, repeatedly vilified by our elected officials, and where "the only real motivation anyone...now has is fear?"
I am not surprised by the resignation. I am grateful that he stuck it out this long. I regret he found it necessary to give away the unconfiscated portion of his compensation, but I fully appreciate and support his belief that he "at least deserve[s] to dictate how [his] earnings are spent."
The sanctimonious outrage expressed by Congress at the greed of businessmen is severely misplaced. Is it greed when one desires to keep that which one has earned through voluntary exchange? Is it greed that motivates people to work hard to improve their own lives through their own efforts?
Or, is greed perhaps instead when someone attempts to live off the hard work of others? Isn't greed more properly defined as desire for that which you have not earned yourself, whether it is money, or fame or moral credit?
When purveyors of force and power are publicly lauded for violating property rights and the rule of law, and the men who produce and exchange voluntarily are vilified and punished, ours is truly an upside-down world.
Who is John Galt?
He is the man who said:
"I swear by my life and my love of it that I will never live for the sake of another man nor ask another man to live for mine."
He is Ayn Rand's hero in Atlas Shrugged who who teaches that each man is a sacred end in himself, that the initiation of force is the ultimate evil between men, and voluntary trade of value for value is the only way for everyone to gain.
Recovery will not occur and prosperity can not return until we as a country can recognize that self interest is not greed, and that the rule of law and property rights are requirements not just for a functioning economy but for our lives.
Sunday, March 22, 2009
The cause of our suffering: too much saving?
I hope you'll check it out.
Saturday, March 21, 2009
xkcd does it again.
If you want to see what what a million looks like compared to a billion (and a trillion) look here.
(KJ--Thanks for the reminder of this webcomic)
Thursday, March 19, 2009
What Constitutes Perpetual Debt?
"I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt."
--Thomas Jefferson, third US president, architect and author (1743-1826)
Our national debt is now calculated to be 11 trillion dollars ($11,000,000,000,000.)
Are we there yet?
Tuesday, March 17, 2009
Please ignore the Man behind the curtain
"The Real AIG Outrage"
"President Obama joined yesterday in the clamor of outrage at AIG for paying some $165 million in contractually obligated employee bonuses" which is peanuts compared to the $173 billion "to fund the government's AIG "rescue." This federal takeover, never approved by AIG shareholders, uses the firm as a conduit to bail out other institutions...Since September 16, AIG has sent $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world. This includes at least $20 billion to European banks.And from Fox/Business: "Amid AIG Furor, Dodd Tries to Undo Bonus Protections in the 'Dodd Amendment' Rules"
The Beltway crowd has been selling the story that AIG failed because it operated in a shadowy unregulated world and cleverly exploited gaps among Washington overseers...Scott Polakoff, acting director of the Office of Thrift Supervision, told the Senate Banking Committee this month that, contrary to media myth, AIG's infamous Financial Products unit did not slip through the regulatory cracks. Mr. Polakoff said that the whole of AIG, including this unit, was regulated by his agency and by a "college" of global bureaucrats."
"Senate Banking Committee Chairman Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.95, 0.1699, 21.78%) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit...While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax."
"If you bound the arms and legs of gold-medal swimmer Michael Phelps, weighed him down with chains, threw him in a pool and he sank, you wouldn't call it a 'failure of swimming.' So, when markets have been weighted down by inept and excessive regulation, why call this a 'failure of capitalism'?"
George Mason University professor Peter Boettke, quoted by Eamonn Butler in "Believers in Free Markets are Fighting Back"
Monday, March 16, 2009
The Importance of Being Principled
Once you relinquish your property rights, there is no principle to stand between you and the mob. Without the inalienable right to private property, we all are beggars or thieves, masters or slaves.
Sunday, March 15, 2009
Free Enterprize--What a quaint idea
Friday, March 13, 2009
The Benevolence of Capitalism
"By virtue of exchange, one man's prosperity is beneficial to all others."
-- Frederic Bastiat, Economic Harmonies
(1801-1850) French economist, statesman, and author. He did most of his writing during the years just before -- and immediately following -- the French Revolution of February 1848
HT Liberty Quotes
Wednesday, March 11, 2009
The Fatigue of Central Planning
Maybe that's because he is literally trying to do the work of millions.
A market economy is the result of an uncountable number of individual decisions and actions, coordinated through price signals which provide crucial information on the availability of every imaginable resource. Profit and loss calculations provide essential feedback on the relative efficiency with which a multitude of producers use those recourse to meet the needs and desires of an even larger number individual consumers.
Central planning consistently fails because it is impossible for a small number of individuals, let alone one man, to obtain the requisite information, create the necessary plans and subsequently attempt to implement them.
Mr. Obama, meet the Fatal Conceit.
"But it's not fair!"
Because it's not fair that the "rich" have more money (and he wants to spend it.)
Reminds me of when I have to tell my children we can't afford something and their retort is "But it's not fair!!" (Insert whiny high-pitched voice and stamping feet.)
Tuesday, March 10, 2009
You've got to see this
What does one TRILLION dollars look like?
Let's start with a stack of one million dollars.
(I'm told I need several stacks like this one in order to retire.)
Now think about some of the figures we've heard lately.
Annual Government spending for 2007 was just under $3 trillion. Revenue was $2.5 trillion. Budget deficit therefore was 1/2 a trillion dollars.
The U.S. GDP in 2007 was $14 trillion. In 2008, it was just over $14.5 trillion.
At the end of 2007, the national debt was $9.3 trillion. On Sept. 30, 2008 (the end of the fiscal year) it was just over $10 trillion.
In the last half of 2008, government spending for bailouts and other guarantees related to the financial crisis resulted in new debt and obligations of an additional $8.7 trillion.
Keep in mind what that million dollar bundle looks like.
And now take a peek at one trillion dollars.
Do you see the guy standing in the left-hand corner?
Now imagine 9 more of these.
What the heck do we think we are doing?!
Monday, March 9, 2009
2009 International Conference on Climate Change
Here's part of what Joseph Bast had to say in his opening remarks:
Approximately 700 people have registered for this event, nearly twice as many as attended last year’s conference. We are delighted to demonstrate once again the breadth and high quality of support that the “skeptical” perspective on climate change enjoys.
Speakers at this conference will address questions that go to the very heart of the global warming debate:
- Does the plateau in global temperatures during the past eight years contradict computer model predictions?
- Do proxy records of ancient climates contradict how computer models characterize the role of carbon dioxide in climate change?
- Does the modern warming have the “fingerprint” of having been caused by greenhouse gases?
- Is there a case for governments to legislate reductions in greenhouse gas emissions?
The 80 scientists, economists, and policy experts speaking at this conference have no shared agenda and no institutional interest in inflating the risks of climate change, and they bow to no government over-seers. They come from 14 countries and 28 universities. They speak out against what the IPCC and many in government and the media claim to be a consensus because their own independent research suggests otherwise.
Many of the speakers' talks will eventually be posted on the web. So far all that's up are Bast's opening words and the keynote speech by Dr. Richard Lindzen, Professor of Meteorology at M.I.T.
Also, portions of the conference will be broadcast live today (Monday) and tomorrow by Swedish blogger Maggie Thauerskold at her Web site, The Climate Scam.
Last year, I was fortunate enough to attend the three-day conference. I had a hard time choosing which talks I wanted to hear most (there were three separate tracks running at any one time!) The speakers were proficient in many different disciplines including climatology, paleoclimatology, physics, politics, economics and policy analysis---all of which have important contributions to make in understanding the challenges we face. Fortunately, many of the talks from last year can still be accessed here. It is encouraging to listen to so many well-informed speakers, to learn more about their research, and to hear of the many efforts being made to bring more rationality into the debate over climate change.
Here are a few of the talks I would recommend:
- William M. Gray, Ph.D. - Oceans, Not Carbon Dioxide, Are Driving Climate
- Vaclav Klaus, Ph.D. - We Should Not Make Big Mistakes over Climate Change
- Roy W. Spencer, Ph.D. - Recent Evidence for Reduced Climate Sensitivity
- Patrick J. Michaels, Ph.D - Global Warming: Some Convenient Facts
- Ross McKitrick, Ph.D. - Quantifying the Influence of Anthropogenic Surface Processes on Gridded Global Climate Data
This year, I was unable to justify spending the money to go again, especially after almost half of our savings disappeared in the recent stock market fall. My biggest hope is that by next year the conference won't be necessary--people will finally understand that the alarmist concerns are not scientifically justified (or that restrictive political action is not morally defensible.) But since I can't count on either of those happening, I'll try to set aside enough money for next year's conference.
Saturday, March 7, 2009
The lack of common sense, let alone proper understanding of the laws of economics is astonishing.
A few examples:
1. In a crisis, with a proximate cause of too much lending and borrowing, the solution offered is yet more debt (and LOTS of it), along with propping up those who miscalculated and mismanaged their finances-- guaranteeing their mistakes will be maintained.
2. In an environment of uncertainty, and where savings are minimal or non-existent, we are told rebuilding our reserves of cash and capital is destructive.
3. We are asked to believe that the sum of prudent individual action (paying off debts, spending less, saving more) is aggregate disaster.
4. At a time when 92.4% of the labor force are employed, and 90% of mortgages are NOT in default, we are told today's crisis is unprecedented and requires massive, immediate, emergency action by the government.
(Update: BLS Feb.'09 report shows employment rate now closer to 90%)
5. The Bailouts aren't working. Money is being poured into leaky, sinking ships (Big 3 auto companies, AIG, Freddie and Fannie are prime examples) without addressing the cause of their failures, and so they will coming back for more.
(Update 3-9-09: GM may go bankrupt anyway, taking taxpayer dollars with it.)
6. There has never in history been a fiscal stimulus that actually stimulated the economy. Strong theoretical explanations exist on why a stimulus never will work. And yet, we are going to gamble Trillions of dollars on it working this time. (If you have evidence to the contrary, I'm interested in seeing it.)
7. In the middle of a recession, with unemployment rising and the stock market falling, our president wants to hobble our businesses further with higher taxes and a cap-and-trade on CO2 emissions to address a "problem" whose existence is questionable (see resources in the side bar.).
8. In his speech last week to Congress, President Obama listed three areas which he thinks are in serious trouble and in need of government assistance: health care, education and energy. But 80% of K-12 is already run by government, over 60% of health care is paid for with state funding, and except for the banking industry, few segments of our economy are more regulated than that of energy. Could the fact that these areas already have heavy government intervention have anything to to with the fact they are ineffective, expensive and in short supply?
Wake up America. Your liberty and your prosperity are under attack.
Friday, March 6, 2009
CEO of BB&T discusses the Financial Crisis
"The Financial Crisis: Causes and Possible Cures"
PDF file of talk slides
John Allison is CEO of BB&T, one of America's largest financial service institutions. Having held that position for 20 years, he offers a unique insider's point-of-view on the recent financial crisis in his talk "The Financial Crisis: Causes and Cures." Not all of his solutions are fully consistent with laissez-faire capitalism, but he none-the-less brings some interesting insights to our current financial problems and his suggestions take a large step in a better direction. Topics covered in the talk include:
The central role the Federal Reserve plays in managing and directing our financial system, and thus the central, fundamental roll it played as the ultimate cause of the current financial chaos.The talk is worth the 80 minute investment of time in order to hear a succinct overview and analysis of how we got here, and this banker's well-informed thoughts on steps that could be taken to get us back on track to financial security and rising prosperity.
How money creation by the Fed is used to fund government spending and in the expansion of the national debt.
How the Fed intentionally lowered interest rates in order to create an environment of low risk. This resulted in distorted signals and incentives which led to both the malinvestment of resources and the discouragement of saving.
How other policies of the Federal Reserve, the S.E.C., the FDIC undermined and destabilized banks by driving the increases in leverage and risk-taking, as well as the depletion of capital--and how these policies remain unchanged today.
The harmful contributions of the rating agencies and fair value accounting (mark-to-market)
The central role of the Fed, the FSLIC, Freddie and Fannie in encouraging and facilitating sub-prime lending which served as the proximate cause of this particular crisis.
The politically-driven misuse of legitimate credit instruments: CDO/SIV/CDO2/CDS
Bailouts: why they won't work; how they hurt healthy banks and stop private solutions
Why short-term pain is now unavoidable, and what strategies and policies might help shorten the correction period as well as work towards long-term stability and growth.
Identification of the underlying philosophy and ideology used to justify and direct government intervention into economic matters.
During the boom, many people made good-faith economic calculations based on price signals distorted by government manipulation of the money supply. Others took advantage of lax lending standards, or committed outright fraud. Both types of borrowers are now suffering from home foreclosures, and we all are suffering from the effects of business bankruptcies and layoffs. For decades, this country has supported active manipulation of the money supply, directly by the Federal Reserve, and indirectly by Congress and the Treasury. The culpability is multifaceted.
Our next task is to orchestrate the transition from a mixed-economy to one of economic freedom. Figuring out how to dismantle the myriad of government interventions without causing more economic dislocation and destruction is not an easy or straight forward task. I understand the temptation to use government power and funding in order to stabilize the housing market, or to mitigate and repair the damage that government policies have caused. But, even in periods of transition, we must attend to the basic principle of individual rights. True solutions can not include any further violations of liberty or property. Even when wielded with intent to heal, such violations can only result in further harm.
Allison's recommendations are a good place to start the discussion, but further refinements must be made if we are to stay true the fundamental principles upon which this country was founded, principles which are both moral and practical: the individual's right to Life, Liberty and Property.
Wednesday, March 4, 2009
Would you like to go to a Tea Party?
Read "Going Galt"
And check out the photos and letters from her readers.
Here's a few of my favorites:
And this little heart-breaker:
Greenspan's argument in favor of Capitalism
Let’s examine Greenspan’s reason for abandoning what he considers the free market. His reason is that free markets cannot be entirely trusted, since government regulators in charge of free markets cannot forecast with 100 percent accuracy. “Yes, I found a flaw,” Greenspan said in response to grilling from the House Committee on Oversight and Government Reform.
“That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.” He went on to say: “We cannot expect perfection in any area where forecasting is required.” He also said: “We have to do our best but not expect infallibility or omniscience.”
The media spun this as Greenspan abandoning free market principles. Maybe that is what Greenspan intended to convey, or maybe it wasn’t. But one thing is certain, regardless of his motives. Greenspan is not condemning the free market and capitalism. He is simply acknowledging the obvious:
That government regulators – even the chief government regulator, the Federal Reserve Chief – cannot be omniscient, cannot know everything, and cannot predict everything.
The irony of these comments is that Greenspan, whether he intends to or not, is providing one of the best arguments in favor of free markets and capitalism by demonstrating that man is not capable of controlling and forecasting everything. Therefore, it’s best to leave man alone, on an individual case-by-case basis, to assess what makes most economic sense.
Tuesday, March 3, 2009
Credit Default Swaps and the U.S. Debt
When you purchase a CDS, it is something akin to buying insurance for your investment. It's an attempt to decrease your risk on a credit derivative. As a buyer of a CDS, you pay a premium to the seller, who then is obligated under the agreement to pay you a specified amount if the credit derivative covered by the CDS goes into default. The idea is to financially protect yourself no matter what happens to the value of the loans or bonds upon which the derivative is based. If the loans or bonds retain their value, you gain from your original investment. If they loose value, you get a payoff from whoever sold you the CDS.
If used appropriately, you are able to minimize your risk. In an interesting twist, because you don't have to own the underlying credit derivative, CDSs can also be bought and sold separately, taking on a life of their own and looking a lot more like gambling than investing (not that I have a problem with gambling, as long as it's clear that's what you're doing.)
Similar to short selling, CDSs have an important role in capital markets by reflecting the perceived value of various credit derivatives and the status of the bonds and debts from which they are derived. High "premiums" for a CDS signal that the underlying loans and bonds are considered to be at a greater risk for default.
So that brings me to the latest interesting piece of news: The cost of purchasing a CDS on U.S. Treasuries is now higher than the cost of buying a CDS on Pepsi or IBM--or even government debt from France!!
Probably has something to do with all those spending bills Congress has passed lately, don't you think?
HT George Washington's. Blog
Monday, March 2, 2009
More on Nationalization
"When is Nationalization Not Nationalization?" at simply Capitalism
On the importance of resisting injustice
"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue till they have resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they suppress."
-- Frederick Douglass (1818-1895), escaped slave, Abolitionist, author, editor of the North Star and later the New National Era
"Let us disappoint the men who would raise themselves upon the ruin of our country."John Adams (1735-1826) Founding Father, 2nd US President
HT Liberty Quotes.
Sunday, March 1, 2009
Bank Nationalization by any other name....
By Ari Levy Jan. 23 (Bloomberg) --
The U.S. government’s decision to pledge billions of additional dollars with strings attached to Citigroup Inc. and Bank of America Corp. may be nationalization by another name, according to former bankers and regulators.
Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.
“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”
Government interventions lead to market distortions which will lead to further government intervention until it is understood that it is the interventions causing the problems in the first place. This is the danger of a mixed economy and democracy. Our economy contains elements of the free market and of political intervention. When something does not go as desired, guess which part gets blamed by the politicians?
The WSJ reported on February 25 that “Bernanke Again Pushes Back Against Nationalization:”
In response to a specific question about Citigroup Inc.’s current woes, Mr. Bernanke told the House Financial Services Committee, “We will see how their test works out and we’ll see what evolves.” Nationalization, he said, misses the point.
Asked if the Citigroup could end up nationalized, Mr. Bernanke said he doesn’t see that happening. “It may be the case that the government will have a substantial minority share in Citi or other banks, but again we have the tools… to make sure that we get the good results we want in terms of improved performance” without the negative effects of a bankruptcy process or seizure, which would be disruptive to the markets, Bernanke said.
He added that he defines nationalization as the government taking over 100% of a firm and zeroing out stock. “I don’t think we want to do that,” he said. “I don’t think we need to do that.”
So, it’s not “nationalization” according to the Fed Chairman unless one government controls the entire 100%? How convenient.
The US will match other sovereign wealth funds dollar for dollar to acquire up to a 40% stake in Citigroup for the Feds. Call it what you will, e.g. call it “Unicornization,” but Citigroup is a private organization no more. It’s been nationalized.